Embrace the Change or be Penalised Fatal Collapse for Some, Opportunities for Others

Recently Rob O’Byrne from the Australian Logistics Bureau published a short article about supply chain trends that could, “… truly shake you up” and even precipitate a fatal collapse.

However, there is one trend overlooked by O’Byrne. It is this one trend that, when used in conjunction with the singularly most important supply chain resource of today, has the potential to revolutionise all aspects of supply chain more than software and the various process models combined.

Mark Oldfield, Partner with Camden Partners and head of the Supply Chain Practice takes a critical look at some of O’Bryne’s trends. Oldfield reveals the one trend that must be embraced and defines the supply chain leader of tomorrow.

Click to:  “Thought Supply

Improving Your Freight Costs 3 – What do you need?

Requirements and Standards – these can be different for every shipper (you) and most of the time it will depend on what your customer wants. For example same-day, next day, normal transit, etc.

Even before getting any quotes find out what is important to you – and your customers. Make sure you understand what it is your customers really want, for this I have a great example. A client was told by many of their customers in WA, they needed to speed up their deliveries as they were always too slow. After reviewing the delivery history and talking further to customers, the issue was not the speed but the reliability as deliveries could take anywhere between 5 to 20 days for the same customer; a different problem and easier to fix.

Other requirements include:

  • Reporting – what info do you need, how often and is it ‘self-service’ or automatically sent.
  • Invoicing – what are the terms. 7 days is standard terms but ask for better.
  • Loss/Damage – what is your compensation? Here volume counts, if you have a $5M account you will be able to negotiate a better deal than zip, nothing (their reason: “We are not common carriers”). You should at least have the cost of the consignment refunded.
  • Claims – When (if) you do claim, how long will they take to research and settle. 45 days after notification is more than adequate. If it takes longer, it will get lost-in-time and the claim will quietly disappear and die.
  • Scanning – Freight providers will not generally take accountability for any consignment until it is scanned into their system. Often, this is not until it is scanned at their receiving depot. Try and get scanning at your site – as it is collected.
  • PODs – in the age of the cloud, these should be available within 2hrs of delivery and no more than 36hours for remote areas. They should also be FREE unless archived (typically after 3-6mths).
  • Action on Error – What will your freight provider do when a delivery has been lost/misplaced or will not meet its due delivery time? They should be advising you of the fact and a new ETA and before your customer rings you complaining of a no show.

Once you have what you want/expect from your freight provider, you can then maintain a focus on your requirements while assessing their quote and not be distracted by their marketing information. Next phase – getting the quotes.